ABRAHAMS & WILSON

[2011] FMCAfam 1037

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ABRAHAMS & WILSON [2011] FMCAfam 1037

FAMILY LAW – Property – de facto relationship – husband’s occupation of wife’s homes – merger of capital funds late in relationship – relevant asset pool for adjustment – assessment of contributions.

Family Law Act 1975, ss.90RD, 90SD, 90SF, 90SM

Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, (2003) 30 FamLR 355
In the marriage of Lee Steere (1985) FLC91-626
In the marriage of Ferrarro (1993) FLC92-335
In the marriage of Clauson (1999) FLC92-877)
Kessey and Kessey (1994) FLC 92-495 (Full Court)
Farmer and Bramley [2000] FamCA 1615; (2000) FLC 93-060
Figgins and Figgins [2002] FamCA 688; (2002) FLC 93-122 (Full Court)
Russell and Russell (1999) FLC92-877
Teal & Teal [2010] FamCAFC 120

Applicant: MS ABRAHAMS

Respondent: MR WILSON

File Number: SYC 3995 of 2011

Judgment of: Foster FM

Hearing dates: 15 and 16 September 2011

Date of Last Submission: 16 September 2011

Delivered at: Newcastle

Delivered on: 29 September 2011

REPRESENTATION

Counsel for the Applicant: Mr Dura

Solicitors for the Applicant: Slade Manwaring Solicitors D H Dwyer Forbes & Yeo

Counsel for the Respondent: Ms Cotter-Moroz

Solicitors for the Respondent: D H Dwyer Forbes & Yeo

ORDERS

1. That upon sale of the property Property N the wife and husband do all things necessary to authorise and direct that the sale proceeds be applied in the following manner and priority:

   a)In payment of agents commission on sale,

   b)In payment of legal costs of sale,

   c)In payment of any contract adjustments on sale,

   d)In payment to the wife of $19,915 representing marketing and other expenses pursuant to orders of the Supreme Court of NSW,

   e)In discharge of the first mortgage (about $515,869), 

   f)From the sum equivalent to 40% of the balance then remaining:

   i)as to the sum of $40,000 to the wife or as she may direct in writing,

   ii)and the balance to the husband or as he may direct in writing,

   g)from the balance then remaining discharge of the second mortgage (about $75,264), and

   h)in payment of the balance then remaining to the wife.

IT IS NOTED that publication of this judgment under the pseudonym Abrahams & Wilson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYC 3995 of 2011

MS ABRAHAMS

Applicant

And

MR WILSON

Respondent

REASONS FOR JUDGMENT

Applications

1. These are defacto proceedings for property settlement.

2. The applicant defacto wife sought orders in her application filed on the 30th of June 2011 as follows:

   a)that all net proceeds from the sale of Property N ["the Property N property"] after payment out of selling costs and secured mortgage liabilities, be and is hereby declared to be the sole and absolute property of the applicant.

   b)Consequential orders to give effect to order one including orders for the release of any such moneys held in trust.

   c)That subject to the foregoing, each party be and is hereby declared to be the sole and absolute owner of all of the property in each parties respective possession, ownership and control.

   d)That the applicant have leave to amend the final relief sought herein, to seek further or other relief, consequent upon the respondents compliance with these obligations to make a full and frank disclosure.

   e)That the respondent to pay the applicant's costs of and incidental to these proceedings.

3. The respondent de facto husband sought orders at trial as follows:

   a)A declaration pursuant to section 90RD of the Family Law Act 1975 that a de facto relationship existed between the applicant and the respondent in the New South Wales commencing on October 2003 and continued until it broke down on the 6^th of September 2010 at Property N and as defined by section 4AA of the Act.

   b)That pursuant to section 90SM of the Act, the applicant and respondent to all acts and things necessary to authorize the release of $436,424 paid into court or held by the parties to the respondent.

   c)In the event that the monies paid into court or held by the parties are insufficient the applicant to pay the balance of the moneys to make up the sum of $436,424.

   d)In the alternative pursuant to section 90SM of the Act, the applicant paid direct to the respondent the sum of $436,424 within 30 days of the date of these orders.

   e)Further or in the alternative that any property acquired by the applicant be sold and the applicant pay the balance of the moneys to make up the sum of $436,424.

   f)That subject to these orders, the applicant and the respondents be declared as against each other to have the sole right, title and interest in, and to be the legal and the beneficial owners of:

   i)any motor vehicles, plant and equipment, chattels, goods, furnishings and real property and other property which at the date hereof are in their possession respectively.

   ii)Any moneys, shares and debentures which stand in their sole names respectively as at the date hereof.

   iii)Any entitlements to superannuation which stand in their sole names respectively as at the date hereof.

   g)That if the applicant or the respondent refuses or neglects to execute any document that he, she or they are required to execute pursuant to these orders, that the Registrar of this Court, be appointed pursuant to section 106A to execute such deed or instrument in the name of the applicant or the respondent, and to do all acts and things necessary to give the validity to the operation of the document.

4. The applicant de facto wife relied upon the following documents at trial

   a)initiating application filed 30th of June 2011

   b)financial statement filed 30th of June 2011

   c)affidavit filed 30th of June 2011

   d)affidavit filed 8^th of September 2011.

5. The respondent de facto husband relied upon the following documents at trial:

   a)response filed 18^th of July 2011

   b)financial statement filed 18th of July 2011

   c)affidavit filed 18th of July 2011.

Jurisdiction

1. The requirements for jurisdiction are satisfied. At the commencement of the trial it was common ground between the parties that the parties had lived during their relationship in New South Wales (s.90SD) and that the relationship was for at least two years and that both parties had made substantial contributions as contemplated by the provisions of section 90SM(4)(a), (b) or (c) of the Act (s.90SB).

Background

1. The applicant de facto wife (“wife”) at the time of trial was 56 years of age.  She was in receipt of a disability pension as a consequence of her health circumstances which see her with a significantly diminished life expectancy and significant physical disabilities.

2. Despite her ill health, the wife cares for her daughter [Y], aged 22, who suffers significant health issues and is in receipt of a disability pension.

3. The respondent de facto husband (“husband”) at the time of trial was 69 years of age. He is in fair health.

4. The parties commenced to cohabitation in about October 2003. At that time the respondent husband moved into the applicant wife's property at Property F. The parties separated on 6 September 2010.

5. The husband had an interest in his former matrimonial home at Property G, some superannuation later realised in the sum of about $114,000 and his company [U] Pty Ltd. The husband did not realise his interest in the Property G property until 2006.

6. At the time of cohabitation the wife’s children [X] and [Y] were part of her household. [Y] was then aged 14 and attending [N] School as a boarder, returning to the home on holidays. In Year 11 [Y] suffering ill health, returned to reside in the wife’s home. During her attendance at [N] School the wife met the private school fees from her mortgage drawings.

7. The child [X] was 19 at cohabitation and attending [university omitted]. The wife paid the bulk of his university fees from her mortgage drawings.

[T] Pty Ltd.

1. At the time of cohabitation the wife conducted a business through her company [T] Pty Ltd which operated [omitted]. The company financial statements for the financial years 2008 to 2011 inclusive are in evidence. (Exh D) As at the 30 June 2008 the company had accumulated trading losses of over $436,000.

2. The company’s activities appear to have been propped up by the wife advancing funds to the company over a period of years with her loan account as at 30 June 2010 being in the sum of $154,437 and the company’s balance sheet evidencing accumulated losses at that time of $130,665. It is apparent that the company’s trading affairs made no real contribution to the wife’s expenses over the cohabitation. Indeed the wife commenced to receive a widow’s allowance in about 2001 which continued throughout cohabitation.

3. Following the wife’s admission to hospital in January 2009 the company ceased to trade by March 2009. As at 30 June 2011 the company had effectively no assets and owed the wife $125,470 with no prospect of that ever being repaid.

4. Whilst the husband asserts some contribution to the company it is of little consequence due to the trading circumstances of the company and its ultimate failure.

[U] Pty Ltd

1. In the financial year of cohabitation [U] Pty Ltd for the year ended

   
   

   30 June 2004 has current assets represented by cash at bank of about $218,000. It had accumulated losses of $250,732 and owed associated entities including the husband a total of $454,000. Its trading loss for the year was $21,535. (Exh K)

2. The historical financial statements for the company and the husband’s personal tax details are in evidence (Exhs F, J and K). The husband’s taxable income for 2004 was $143. There is no evidence as to such other funds as may have been available to the husband from his company in this period other than the provision of a motor vehicle to the husband and unquantified loan account drawings.

3. In following years the financial records evidence the following:

   a)In 2005: The husband’s taxable income was nil. Although associated loan accounts in the balance sheet evidenced drawings of about $90,000 with a similar reduction in the funds held at bank by the company, there is no evidence as to the funds drawn by the husband as against his loan account. The provision of a motor vehicle to the husband continued.

   b)In 2006: The husband had no taxable income. During this period the husband realised his interest in his former matrimonial home at Property G in the sum of about $900,000. He advanced these funds to the company increasing his loan account to a total of $971,625. There is no evidence of any significant drawing by the husband as against his loan accounts in this period. Otherwise the company was indebted to Ms W (the husband’s former wife) for $72,102 and [A] Pty Ltd in the sum of $201,485.

   c)In 2007: The husband had a taxable income of $24,800. This sum represented directors fees paid to him by the company. Income earned by the company represented interest received on money at bank earned on funds the husband had advanced to the company. The husband’s loan account reduced by about $47,500 and the company debt to Ms W was reduced to nil and the debt owing to [A] Pty Ltd was reduced by about $119,000 down to $82,251. As to the debt to Ms W there is no evidence as to how this transaction was facilitated as no loan account schedules were in evidence.

   d)In 2008: The husband’s taxable income was $25,800. This sum represented directors fees paid to him by the company. Otherwise the husbands loan account reduced by about $6,500 to $917,562. The debt to [A] Pty Ltd remained unchanged.

   e)In 2009: The husband had no taxable income (Exh G). In this taxation year the husband caused the company to purchase a [vehicle omitted] that was then run through the company. The company cash funds reduced by about $706,000 reflecting the purchase of the [vehicle] in the sum of $425,023 and a reduction in husband’s loan account of $222,000 and an operating loss of about $56,000. The husband’s drawings were it seems in part applied by him to the purchase of the Property N property.

   f)In 2010: The husband had no taxable income (Exh G). The husband’s loan account reduced by $205,000 and the debt of the company to [A] Pty Ltd was paid down to only $200. The husbands loan account drawings were in part applied to Property N mortgage payments. In November 2009 the company sold the [vehicle] and proceeds of sale in the sum of $394,540 were deposited to the company account. (Exh H) In April 2010 the company advanced a loan of $100,000 to his sister and brother in law. In about May 2010 the husband commenced to receive the age pension. Two months after the end of this financial year the parties separated.

4. The husband during cohabitation drew funds from these various sources for his household and living expenses, capital contributions to the purchase of Property N and other expenditure. Absent loan account schedules the court can not determine how various loan account funds were used.

Property F

1. The applicant wife estimates that the value of the Property F property at the time of cohabitation by reference to her recall of its later sale price to be $1,360,000. At the time of cohabitation she asserts that there was a mortgage secured over the property in the sum of approximately $200,000.

2. Prior to cohabitation the wife received by way of inheritance from her late grandmothers estate funds totalling approximately $353,000. (Exh B). These funds were paid by the wife into her then mortgage account with the [omitted] Bank reducing the balance outstanding on the mortgage to the sum of $149,111 as at the 29th of January 2003 some

   
   

   9 months before cohabitation.

3. The Property F property at the time of purchase by the applicant wife was a newly constructed home and over the period that the applicant wife resided in the property she expended money in the renovation and improvement of the home and its grounds. The husband asserts a minor contribution in “organising” various trades. However the cost of any such work was met by the wife.

4. In November 2005 the applicant wife sold of the Property F property for the sum of $1,290,000.  Prior to its sale the applicant wife expended moneys in preparing the property for sale. At the time of sale of the property the mortgage balance secured was in the sum of $566,807. (Exh C) The mortgage sum represented an increase in the debt of about $366,000 since the commencement of cohabitation, a period of just over two years.

5. It is common ground that the husband made no contribution to the mortgage or property outgoings over this period.

6. The wife’s mother commenced to advance to the wife funds totalling NZ$53,735 over the period from October 2003 until October 2010. Of this sum only about NZ$12,000 was advance to the wife after the purchase of the Property N property. The wife asserts that these advances were gifts.

7. The wife also asserts indebtedness to a Trust in the sum of NZ$115,412. Yet there is no evidence of the receipt of or disposition of these funds by the wife, or any evidence as to over what period the asserted funds were advanced.

Property B

1. On sale of the Property F property the applicant wife purchased the property at Property B for the sum of $869,100. On completion of the purchase the wife had an outstanding mortgage balance secured over that property as at the 31st of December 2005 in the sum of $239,016. (Exhs C, Q and R) The mortgage facility was a line of credit facility with a limit of $521,000. (Exhs Q and R) After purchase of the Property B property the applicant wife expended some moneys on the improvement to that property prior to its later sale in mid 2009.

2. In January 2009 the wife was admitted to hospital seriously ill. She remained in hospital until June 2009. The husband remained living in her home.

3. On sale of the Property B property for the sum of $860,000 the wife had a then outstanding mortgage balance of $520,000 which was transferred to the then Property N purchase. This represented an increase of the mortgage debt of about $280,000 about three and a half years. It is clear from the mortgage statements in evidence that the wife simply drew against the mortgage to fund her living expenses with regular and significant transfers to her personal account.

4. It is common ground that the husband made no contribution to the mortgage or property outgoings over this period.

Property N

1. Following sale of the Property B property the wife purchased the property at Property N for the sum of $1,100,000.  The purchase price of the Property N property was funded as follows:

   a)Wife proceeds from Property B           $250,629

   b)Wife from sale deposit funds               $  20,000

   c)Husband – deposit  $105,000

   d)Husband – cash  $224,397

   e)Husband – cash  $    1,416

   f)Husband – on a/c stamp duty          $  26,010

   g)Transfer of mortgage   $520,000

2. The husband funded his contributions by way of drawings against his loan account in [U] Pty Ltd and the realisation of a superannuation investment in the sum of $114,089. (Exh L)

3. Otherwise the husband expended some funds on the purchase of furniture items for the Property N home. The division of contents is not an issue between the parties.

Deposit Funds from Property B

1. Following sale of the Property B property the husband banked on the 19 June 2009 the balance of deposit cheque from the sale in the sum of $74,734 into the V2 account of his company [U] Pty Ltd.(Exh H) That account then had a balance of $75,221. It is common ground that he repaid on the 23 June 2009 loan funds of $20,000 that he borrowed to contribute to the Property N purchase. This sum of $20,000 was clearly funds of the wife and is accounted for above.

2. The parties are at odds in relation to the disposition of the balance of these funds save for the sum of either $14,000 on the wife’s case or $15,140 on the husbands case paid off the wife’s credit cards. This leaves a balance of about $40,000 the wife asserts is unaccounted for.

3. The husband asserts he paid various debts of the business and other expenses. He has no receipts, has produced no cheque butts, credit card statements nor provided information as to such payments to the wife’s accountant.

4. From the V2 account the husband over a period transferred various lump sums that reduced the balance of the V2 account to $218 as at 22 October 2009. Save for the loan repayment all of these transfers were to the business account of his company. The business account statements are in evidence (Exh I) and save for amounts of $250 and $500 drawn by cheque, none of the cheque transactions equate to the sums asserted to be paid by the husband and many of the withdrawals are by cash cheque. Other debits are by cheques which are not in evidence.

5. It is the husband’s assertion that he used the funds for the wife’s purposes. He has adduced no evidence that satisfy the court that as to the sum of about $40,000 he did so. This sum will be dealt with later.

6. The parties occupied the Property N property until their separation in September 2010. During this period, the respondent husband paid seven payments on the mortgage totalling $25,637 and the wife paid eight payments on the mortgage. The husband expended about $34,000 on improvements to the property.

7. Since separation the wife has expended money in and about the preparation and presentation of the Property N property for sale. She is entitled to those funds by order of the Supreme Court.

8. Unbeknown to the husband, the wife in about August 2010 (Exh Q) borrowed further funds on the security of the Property N property. The funds from this loan were applied by her to meet ongoing mortgage payments and living expenses with the balance of the loan at trial being $75,264.

Supreme Court Proceedings

1. Following separation the husband lodged a Real Property Act caveat over the title to the Property N property.  Following a lapsing notice served by the wife the husband sought relief in the Supreme Court of NSW seeking to support and extend the caveat to protect his asserted equitable interest in the property. The judgment of His Honour Justice Brereton is in evidence (Exh P) The court refused to extend the caveat but made orders to protect the asserted interest of the husband.

2. Those orders provided that the proceeds of sale of the Property N property be applied as follows:

   a)Payment of agents commission,

   b)Payment of legal costs on sale,

   c)Payment of any contract adjustments,

   d)Payment to the wife of $19,915 representing marketing and other expenses,

   e)Discharge of mortgage (about $521,562) excluding second mortgage (about $73,00),

   f)Payment of 34% into a controlled monies account,

   g)Payment of second mortgage,

   h)Payment of the balance to the wife.

3. The husband discontinued the Supreme Court proceedings in July 2011 following commencement of these proceedings..

4. The sale of the property has not yet settled. Contracts for sale were exchanged by the wife on the 7 May 2011 at a sale price of $1,140,000. The parties agree that agent’s commission will be about $25,000 on settlement which will be on or about the 27 October 2011. That being the case the proceeds of sale after selling costs will be about $1,115,000.

5. The wife is to receive under the Supreme Court orders reimbursement of $19,915.

6. On the 1 July 2011 the wife contracted to purchase the property at Property T for the sum of $700,000, with all in purchase costs being about $735,000. The wife has organised mortgage finance in the sum of $400,000. As to why she contracted to purchase in the uncertain circumstances of this matter at that time is not known.

The Law.

1. The parties lived in a de facto relationship. Part VIIIAB of the Family Law Act 1975 provides for alteration of property interests between parties formerly in a de facto relationship.

2. The legislative process and course of consideration is similar to that under Part VIII of the Act in respect of married persons. 

52.Section 90SMof the Act defines the Court’s powers in determining applications for property settlement between de facto couples. Sub-section 90SM(3) of the Act provides that:

The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

53.Section 90SM(4)of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:

(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(ii) otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

(ii) otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and

(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and

(e) the matters referred to in 90SF(3) so far as they are relevant; and

(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and

(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.

1. Section 90SF(3) of the Act sets out the relevant further considerations which are as follows:

   (a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and

   (b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and

   (d) commitments of each of the parties that are necessary to enable the party to support:

   (i) himself or herself; and

   (ii) a child or another person that the party has a duty to maintain; and

   (e) the responsibilities of either party to support any other person; and

   (f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:

   (i) any law of the Commonwealth, of a State or Territory or of another country; or

   (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g) a standard of living that in all the circumstances is reasonable; and

   (h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l) the need to protect a party who wishes to continue that party's role as a parent; and

   (m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (n) the terms of any order made or proposed to be made under section 90SM in relation to:

   (i) the property of the parties; or

   (ii) vested bankruptcy property in relation to a bankrupt party; and

   (o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:

   (i) a party to the subject de facto relationship (in relation to another de facto relationship); or

   (ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or

   (iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:

   (i) a party to the subject de facto relationship; or

   (ii) a person who is a party to a marriage with a party to the subject de facto relationship; or

   (iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and

   (r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and

   (t) the terms of any financial agreement that is binding on a party to the subject de facto relationship

2. The approach the court is required to adopt in determining an application under section 79 of the Family Law Act for adjustment of property interests is well established by authority (Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, (2003) 30 FamLR 355. In the marriage of Lee Steere (1985) FLC91-626, In the marriage of Ferrarro (1993) FLC92-335, In the marriage of Clauson (1999) FLC92-877). The same approach is required in relation to defacto relationships.

3. The first step is for the Court to identify and evaluate the pool of property including assets, liabilities and financial resources.

4. Secondly the Court is to consider the contributions of each of the parties to the property pool including financial and non-financial and direct and indirect contributions to the acquisition, conservation and improvement of any of the property and including any contribution in the capacity of homemaker and parent.

5. The third step for the Court is to consider the matters set out in (3) of the Act.

6. The Court is also to consider the effect of any proposed order upon the earning capacity of either party. This is of no relevance to this matter.

Property of the Parties

1. At the commencement of proceedings the parties provided an aide memoir as to the draft pool. That document was subject to change, amendment and agreement during the course of the matter.

2. The asset  pool is found by the court to be as follows:

Property N	1,140,000	Agreed
W	[bank omitted] Account ([1])	2,029	Agreed
W	[bank omitted] Account ([2])	462	Agreed
W	[bank omitted] ([T] Pty Ltd) Account	16,094	Agreed
W	Contents	3,000	Agreed
H	Contents	2,500	Agreed
H	[bank omitted] account	1,071	Agreed
H	[U] Pty Ltd	192,927	See below
H	Funds retained from Property B deposit	40,000	See above
H	Paid legal fees	0	See below
$1,445,953
Liabilities:
Mortgage Property N	515,869	Agreed
Agents commission on sale	25,000	Agreed
W	Second mortgage Property N	75,264	See above
$616,133
$829,820

1. The assets of [U] Pty Ltd comprise the loan to the husband’s sister of $100,000, funds on term deposit of $86,010, funds in [bank omitted] account of $5,594, funds in cash management account of $1,323 totalling $192,927. Whilst the husband is owed significant funds by the company the value of his loan account is equal to the company’s available funds.

2. The husband’s paid legal fees in the sum of $48,500 have been paid from his drawings against his loan account to which the wife made no contribution. By reason of the final approach adopted by the court below such fees will not be included in the pool.

Contributions

1. In Kessey and Kessey (1994) FLC 92-495 (Full Court) at 89,151 the Full Court made clear that ultimately all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party:

   “... In many – indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties’ contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party.”

2. In Farmer and Bramley [2000] FamCA 1615; (2000) FLC 93-060, Kay J clearly stated two things, namely:

   “68. The Court’s task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of the hearing and to give such weight to such contributions as the Court thinks is appropriate in the circumstance.

   69. There is nothing in the legislation that requires s 79(4)(a)(b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which the parties are presently possessed.

3. In Figgins and Figgins [2002] FamCA 688; (2002) FLC 93-122 (Full Court) Nicholson CJ and Buckley J observed:

   “134 ... Marriage is and should be regarded as a genuine partnership to which each brings different gifts. ...”

4. The contribution history of the parties is detailed above. Until June 2009 when the parties merged their capital to acquire Property N the husband had resided in the wife’s homes for nearly 6 years without any meaningful or significant contribution to the capital cost of same. His funds were drawn from mainly capital over this period to fund his contribution to living expenses. The wife drew against her mortgage security to fund her homes, the mortgages, her children’s expenses and her contribution to living expenses. It is the courts view that until the purchase of Property N such contributions on balance favour the wife.

5. Upon the purchase of Property N the parties contributed capital as set out above in the proportion of $270,629 by the wife and $356,823 by the husband. That is as to the wife 43% and as to the husband 57%.

6. The wife’s capital at this stage which was represented by her equity initially in Property F and then Property B had been significantly eroded in the cost to her of capitalising her mortgage payments to provide a home for herself, her daughter and the husband. 

7. The husband asserts other contributions in the payment of household and other expenses, driving the wife around after the loss of her licence in 2008, assisting her children, attending to her in hospital and assisting with her medical needs and appointments and the payment of some holiday expenses. The wife asserts that she attended to the primary homemaker duties save for the 6 months she was in hospital. On balance the court considers that such these aspects of the parties non financial contributions are not deserving of adjustment either way and finds that both parties undertook their respective roles in the relationship to the best of their ability.

8. During the remainder of cohabitation the mortgage payments were paid substantially equally. However the wife negotiated a second mortgage over the home to accommodate her further living expenses and mortgage payments. That loan at present stands at $75,264 and in all the circumstances it should be the wife’s responsibility as she has had occupation of the home to the husband’s exclusion since separation.

9. In this matter the parties kept their finances separate. Both parties had recourse to capital that neither can assert any contribution to: the wife as to her equity ultimately introduced into the Property N purchase and the husband as to funds available from his company.

10. Otherwise the husband has failed to account for the balance of the Property B deposit in the sum of $40,000 and he will be required to account for this sum to the wife.

11. The court considers it appropriate in all the circumstances to determine this matter by reference to the estimated sale funds of the Property N property and related liabilities.

12. Thus the asset pool and related liabilities for adjustment purposes is as follows:

W	Property N	1,140,000
Liabilities:
Reimbursement to wife	$19,915
Mortgage Property N	515,869
Agents commission on sale	25,000
W	Second mortgage Property N	75,264
$616,133
$563,867

1. Overall the court finds that contributions to the pool above overall should be regarded as favouring the wife 55/45 subject to the wife firstly being reimbursed the sum provided for in the Supreme Court orders and being liable for the second mortgage loan.

2. The effect of this contribution finding is approximately as follows:

Property N	1,140,000
Less:
Reimbursement to wife	$19,915
Agents commission on sale	25,000
1,095,085
Mortgage Property N	515,869
579,216
45% to husband	260,647
55% to wife	318,569
Wife to pay second mortgage Property N	75,264
Balance to wife	243,305

Section 90SF(3)

1. The court considers the relevant factors to be

   (a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship );

   The wife is aged 56 and in grave ill health. It is common ground that regrettably she has a significantly diminished life expectancy. The husband is aged 69 and in fair health.

   (b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   Both parties are in receipt of income tested Centrelink benefits. Their property and financial resources are set out above. Whilst both parties will receive funds from the sale of Property N as to the wife she will have little else. The husband will have his remaining funds in his company which will or should generate some interest income if appropriately invested.

   (d) commitments of each of the parties that are necessary to enable the party to support:

   (i) himself or herself; and

   (ii) a child or another person that the party has a duty to maintain;

   The wife has in her household her daughter, aged 22, who suffers significant ill health.  The daughter receives a disability pension. The wife will continue to care for her daughter whilst she is able.

   (e) the responsibilities of either party to support any other person;

   See the previous factor.

2. In considering the factors referred to above the court is of the view that a further adjustment in favour of the wife of 5% is called for.

Overall

1. Thus overall the pool referred to above is to be adjusted as to 60% to the wife and 40% to the husband as follows:

Property N	1,140,000
Less:
Reimbursement to wife	$19,915
Agents commission on sale	25,000
1,095,085
Mortgage Property N	515,869
579,216
40% to husband	232,686
60% to wife	346,530
Wife to pay second mortgage Property N	75,264
Balance to wife	271,266

Section 90SM(3) - just and equitable

1. The orders the court proposes divide the proceeds of sale of the Property N property. The wife will it is assumed apply funds to her purchase. The husband will probably invest funds to earn income. It is the justice and equity of the actual orders that the court must consider. (Russell and Russell (1999) FLC92-877, Teal & Teal [2010] FamCAFC 120 (25 June 2010). In all the circumstances the court considers the order proposed to be just and equitable.

Conclusion

1. For these reasons the court makes orders as set out at the commencement of this judgment.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Foster FM

Date:  29 September 2011